U.S. chief executives report highest level of economic confidence in two years
DALLAS, February 7 th , 2017 - YPO , the premier chief executive leadership organization in the world, announced today that business confidence in the United States surged in the final quarter of 2016, climbing 4.2 points to 64.6, its highest level in two years.
Chief executives in the United States reported a significant jump in optimism about the U.S. economic outlook, following President Trump's promises to increase infrastructure investment and reduce business taxes.
Almost two-thirds (63%) of U.S. business leaders predicted that economic conditions would improve in the next six months, while only 7% expected conditions to deteriorate. This is a marked upswing from the previous quarter, when only 33% felt that the economic climate would improve and 21% predicted that conditions would worsen.
"After months of uncertainty in the run up to the presidential election, chief executives are feeling that the United States has a clear economic plan, based on a pro-business agenda with promises to boost productivity, create jobs and drive GDP growth, said Dan Monaghan, Managing Partner of Clear Summit Group and a member of YPO . "Business leaders will be keen to take advantage of new opportunities as they arise."
U.S. business leaders are now more optimistic than their counterparts around the world, although most regions saw a modest rise in confidence in the last quarter.
Globally, the YPO Global Pulse Index for the fourth quarter of 2016 climbed by 3.0 points to 62.2, its highest level for two years. Confidence in the European Union remained steady at 60.9, whilst confidence in Asia increased 1.2 points to 61.2. Elsewhere, confidence in Latin America jumped by 2.4 points to 58.3, while confidence in the Middle East and North Africa surged 5.6 points to 59.5. Africa reported a 0.8-point dip to 54.7, making it the second least confident region in the world after non-EU Europe, which increased 2.5 points to 54.3.
Future expectations in the United States
Chief executives bullish about growth in the year ahead
Business leaders in the United States reported a more positive outlook for each of the three main indicators of the YPO Global Pulse Index: sales, hiring and fixed investment.
For the region, the YPO Sales Index showed that almost three-quarters (72%) of respondents in the United States expected to increase revenues in the next 12 months, with only 3% expecting a reduction in turnover. Similarly, the YPO Employment Index indicated that 43% forecast an increase in headcount over the next year, against only 4% who expected to reduce the size of their workforce. The YPO Fixed Investment Index found that a 47% were bullish on fixed investment in 2017 versus only 6% who predicted cuts in investment spend.
Confidence high across small, medium and large enterprises
Business leaders were extremely positive about the prospects for their own organizations in 2017, with a sharp uplift in sentiment across organizations of all sizes. When asked to assess the economic climate over the next six months, 58% of chief executives running large organizations expected conditions to improve, up from 26% in the previous quarter. For business leaders of mid-size companies, 60% predicted an improvement in the economic landscape, up from 33% in the previous quarter. Similarly, 70% of small business chief executives predicted more favorable conditions, again up markedly from 36% in the previous survey.
YPO Global Pulse ® Confidence Index
The quarterly electronic survey, conducted in the first two weeks of January 2017, gathered answers from 1,514 chief executive officers across the globe, including 638 in the United States. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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